DescriptionThis dissertation studies the impacts of employment contracts as well as legal and economic environments on labor market outcomes. Chapter 2 examines the effects of residency laws on public teachers' wages and residential choices using the natural experiment created by the repeal of the residency laws for teachers in Pittsburgh and Philadelphia in 2001. The findings suggest that the residency laws decrease public teachers' wages by ten percent. The data also indicates a significant outflow of residents after the repeal. In order to further investigate whether there is a relocation of teachers due to residency laws, I look at where public teachers are sending their children for schooling. I find that the private school enrolment probability decreases when residency laws are lifted. Chapter 3 studies the factors that determine the enactment of collective bargaining laws for public school teachers. I look at the effects of state specific demographic, political, and economic variables on the decision of a state to adopt collective bargaining laws. I find that state-level school resources such as student-teacher ratio and per pupil expenditures are significant drivers of collective bargaining laws. Furthermore, the political leanings of state governments do not seem to have an important effect on the decision that a state will enact collective bargaining. Finally, state economic conditions appear to have significant effects on bargaining law changes. Chapter 4 focuses on determining whether a spot market or an implicit contracting model better explains the wage determination process over the business cycle. Real business cycle theory employs a spot market model in which current wages are determined by contemporaneous labor market conditions. In contrast, the implicit contract model allows for the history of labor market conditions to determine current wages. I replicate the Beaudry & DiNardo (1991) and extend their investigation along gender, race and regional lines to understand whether labor markets can be explained well or only certain submarkets can be described by one of the models. The results suggest that an implicit contracting model explains the wage determination over the business cycle better than a spot market model for almost all specifications.